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The National Health Service Pension Scheme (Scotland) (Additional Voluntary Contributions) Regulations 2018

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Pension Credit Benefit

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4.—(1) The pension credit benefit to which a pension credit member is entitled under the AVC scheme consists of a pension including, where appropriate, a pension commencement lump sum.

(2) A pension credit member is entitled to the payment of the pension credit benefit when that person attains normal benefit age.

(3) A pension payable in accordance with this paragraph is payable to the pension credit member for life.

(4) The value of the pension referred to in sub-paragraph (1) and any alternative benefit referred to in sub-paragraph (6) is equal to the value of the pension credit rights which have accrued to or in respect of the pension credit member.

(5) Not earlier than 3 months before the date of attaining normal benefit age, a pension credit member, by giving notice to the Scottish Ministers, must make a benefits election which specifies—

(a)whether only a pension payable for life is to be provided;

(b)whether a pension commencement lump sum and a pension payable for life is to be provided;

(c)for whom, if anyone, a dependant’s pension is to be provided;

(d)if more than one pension is to be provided, either—

(i)the proportion of the amount secured by the total investments made under paragraph 2 that is to be applied to the purchase of each pension; or

(ii)the dependants’ pensions to be provided expressed as a percentage of the pension for life;

(e)in respect of every pension to be provided, whether the annual rate of the pension—

(i)is to be fixed;

(ii)is to vary in accordance with the Index; or

(iii)is to increase yearly by a specified percentage or, if lower than that percentage, by the increase in the Index for the year in question; and

(f)the authorised provider who is to provide each pension.

(6) An authorised provider selected by the Scottish Ministers—

(a)must provide a pension credit member with an option to receive the benefits referred to in sub-paragraph (5)(a), (b) and (c); and

(b)may provide such a member with an option to receive the alternative benefits referred to in sub-paragraph (7).

(7) Those alternative benefits are benefits that are equal in value to the benefits referred to in sub-paragraph (5)(a), (b) and (c) and comply with the requirements of the 2014 Act.

(8) A member who wishes to be provided with such alternative benefits must elect to do so by giving the Scottish Ministers notice in writing not earlier than 3 months before attaining normal benefit age.

(9) For the purposes of this schedule the authorised provider must meet the requirements referred to in regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000(1).

(10) Upon receipt of a notice of election under sub-paragraph (5) or as the case may be sub-paragraph (8), the Scottish Ministers must, as soon as reasonably practicable, realise investments made under paragraph 2 and—

(a)where paragraph 5(b) does not apply, apply the proceeds to the purchase of an annuity from the authorised provider specified in the notice of election;

(b)where paragraph 5(b) does apply—

(i)pay the percentage of the proceeds specified in the notice of election as a pension commencement lump sum; and

(ii)apply the balance of those proceeds to the purchase of an annuity from the authorised provider specified in that notice,

and not otherwise; and

(c)where sub-paragraph (8) applies, pay the alternative benefits the pension credit member has elected to be provided with.

(11) Where the conditions in sub-paragraph (12) are satisfied, the Scottish Ministers may realise the investments made under paragraph 2 and apply the proceeds to the purchase of benefits under these Regulations from an insurer that the Scottish Ministers consider—

(a)suitable;

(b)will satisfy the requirements of regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000 and will comply with the requirements of the 2014 Act; and

(c)will fully discharge its liability for payment of benefits under these Regulations.

(12) Those conditions are that the pension credit member has—

(a)attained normal benefit age on or after 1st May 2001; and

(b)attained the age of 75 and not given notice of an election under sub-paragraph (5) before doing so.

(13) Paragraph (11) applies notwithstanding that the benefits are payable to a pension credit member by virtue of that member being a member of the NHS Pension Scheme under—

(a)Part E of the 2011 Regulations;

(b)regulation 2.D.1, 2.D.4, 2.D.5, 2.D.8, 2.D.10, 2.D.11, 3.D.1, 3.D.4, 3.D.5, 3.D.7 or 3.D.9 of the 2013 Regulations; or

(c)regulations 72, 78, 80, 81, 83, 89, or 93 of the 2015 Regulations.

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